Having a business license in Indonesia is one of those compulsory things that present in every country in order to do business. The same rule applies when one tries to do business in Indonesia. No matter the type of company it is, whether it is small sized or medium or even a large corporation, obtaining a business license is absolutely mandatory. It basically ensures that the business in question has been legalized and that it is operating in Indonesia after fulfilling all of the requirements set by the government of Indonesia. Without obtaining a proper business license, the government may end up shutting down the entire business or the company may be penalized heavily.
According to the new regulation formed in the year 2015, all new foreign companies will have to apply for business license in Indonesia. This should be done by providing their financial audit. The financial audit allows a company to apply for a permanent license along with other necessary licenses including import license. The basic idea for such a regulation is so that the government can have an in-depth understanding of the foreign investment being made by the companies. This will help the foreign investors to realize their investment plan as well. Foreign investments in Indonesia will be run according to their intended purposes.
Types of Business Licenses available in Indonesia
- If a company is engaged in general trading of goods and services then they need a normal business license.
- If a company is engaged in the manufacturing industry that does not include oil, gas and thermal energy then they need the industrial manufacturing license.
- Companies engaged in the construction industries require construction business license in Indonesia.
Business License Requirement in Indonesia: In order to obtain a permanent business license, a PMA company will have to meet the following requirements including
- The company in question has been in the production phase.
- The company has surpassed the allotted time of 3 years.
Procedure to apply for the Business License in Indonesia: This is the part of license obtaining process which often leaves a lot of foreign investors frustrated. The lack of information can make this seem very difficult but the steps are quite easy in fact. The following steps should be done;
- In order to apply for a permanent license, a PMA company can apply to the Head of Investment Coordinating Board, also known as the BKPM. They can also apply to the Head of Region Investment Coordinating Board, commonly referred to as the BKPMD. The issuance of the business license is heavily dependent on the foreign investment itself along with the type of business activities that would be done. The domicile of the company has a part to play in the issuance of the license as well.
- The next step involves the applicant filling and signing the application form. The business license application form should be submitted at the BKPM or the BKMPD office. Alongside the form all the required documents should be attached.
- The officers at the BKPM or the BKPMD will check all the files and verify them for eligibility. After it is done, they will issue the permanent license certificate.
In order to obtain a business license in Indonesia, one has to submit a list of documents which will be checked and verified before the clearance is given for the business license. The following documents are needed;
- Copy of all the permit approvals that were given during investments.
- Copy of deed of establishment and the amendments.
- Copies of the domicile, NPWP and TDP of the company in question.
- The copy of the contract or rental of the business premises. The certificate from the owner of the building will suffice as well.
- Copies of ID cards and passports of visas for the foreigners.
- Nuisance Act Permit and Location Permit [issued by the SITU]
- List of all the office equipment and industrial equipment deployed by the company.
- Company organizational structure.
Other General Information
Once all the documents have been submitted and the application form have been sent for processing, the applicant can expect to wait for around 14 working days. The business license is generally issued within the said 14 days.
A business license in Indonesia usually has a validity of 30 years unless it is specified otherwise. Do you like to register a company in Indonesia as foreign investor (s)?